The House passed their initial version of the 2008 energy bill. Two major focal points of this bill are the following: it would allow drilling 50 to 100 miles off-shore and it would repeal tax breaks (corporate welfare) for oil corporations. Republicans have been pining for the former and screaming about the latter for months. Americans generally support increased drilling as long as its coupled with renewable energy research funding increases. A clear majority of Americans support rescinding the fossil fuel industry’s welfare. Americans can pretty easily make the connection between $4.00 gas and news of record profits that corporations like Exxon enjoy every quarter. They’re tired of that being the status quo. So I say let Republicans continue to scream about stopping the corporate welfare. They’ll continue to look like ideologues for it.
Republicans are also whining about no “litigation reform”. But here’s the reality: if the off-shore areas end up going up for lease, which would require Senate passage of the same bill (unlikely this year) and no veto by Bush (not a guarantee in the off-chance Congress actually passes something), it’s not like they’ll drill on those new areas. Why? Because here’s the dirty secret Republicans want to keep out of the spotlight: fuel corporations currently hold leases on 68 million acres of land and they’re not drilling on them right now. More than that, those corporations have no plans to begin drilling any time soon. They’re enjoying the high fuel prices too much. Increasing the supply would bring that price down. That situation was true before demand for fuel started falling in the face of $4.00 gas and is even more true now. With demand decreasing, they have absolutely no incentive to put more fuel into the market. So no environmental lawsuits will be issued because no corporation will drill.
So as the Washington Post’s take describes, collecting those taxes and the royalty payments from drilling will yield billions of dollars to the federal government. That money would be spent financing renewable energy development. That scenario is what will allow the nation to reduce its dependence on fossil fuel use. It will also work to level the unfair playing field renewables currently play on against fossil fuels, which receive billions in corporate welfare due to entrenched interests. We can power everything in this country, transportation and buildings together, using only renewable energy resources. Al Gore and Barack Obama both have viable plans to make that happen in relatively short order. The biggest obstacle will be Republicans and their ideologically aligned mega-corporations. Expect them to fight every positive effort to increase renewable energy development like the world will end if that research goes through.
More Republican posturing came from the House Minority Leader, Rep. Boehner. He whined that less than 24 hours passed from the introduction of the bill to the vote on the bill. Republicans were not allowed to offer any amendments either. Why do I call it posturing? Because I don’t remember Boehner complaining when Republicans held after-hour votes or refused to allow Democratic amendments to legislation when they were in the majority. “Elections have consequences”, they said. Yes, Rep. Boehner, they do. When your party can offer the American people something, and not give fuel corporations everything, then you can complain about procedures.
Here’s one bad impact if Congress doesn’t pass an energy bill that Bush signs this year: without new legislation, the moratorium on off-shore drilling automatically ends September 30th. Again, no drilling would actually occur, but areas currently off-limits would be open for the taking.
Another moratorium could expire on the 30th. As the Glenwood Springs Post Independent describes, the oil shale drilling ban could fall, which is of importance to Colorado and other Western states. Specifically, the BLM would be allowed to issue final oil shale drilling regulations. Importantly, one barrier to drilling would remain: states would be able to make the decision whether to drill or not. The BLM would also be allowed to prepare an environmental impact statement for leases. This portion of the bill was advocated for by a Utah Representative.
Among the keys to oil shale drilling is the current non-availability of viable drilling technologies. The main issue is the amount of water required in the process, about 3 barrels of oil to produce one barrel of oil. In a region of the country that is already negatively affected by climate change, the last thing residents will allow is an additional draw on water supplies.
The Post Independent article cites a 2005 RAND report that conjectured 1 trillion barrels of oil in the Piceance Basin might be available. They went on to say there might be as much oil in western Colorado as the entire world’s proven oil reserves. Doesn’ that sound grand? How exactly did RAND arrive at that estimate? One thing I learned at the Big Tent during the DNC last month is that Republicans enjoy reporting on how much oil is “in place”. What they don’t enjoy reporting is how much of that oil is technically recoverable – what do technologies allow? I’ve addressed that above. If RAND estimates 1 trillion barrels of oil might be available, it would take at least 3 trillion barrels of fresh water to recover that oil. How do Nevada, Arizona and California feel about 3 trillion fewer barrels of water? This is where lawsuits would come in: states would sue each other to ensure their water rights are enforced. Republicans also don’t enjoy reporting what is economically available. 1 trillion barrels sounds incredible. But how much of that oil would oil corporations actually try to recover, given the costs involved? The two availability numbers are likely to be different than what RAND’s report discussed. Hiding that information from the public is immoral.
Grist also wrote on the oil shale component of the House energy bill. They bring up the fact that BLM pilot projects have not determined whether commercial scale oil shale development is possible. Republicans can talk about all the in-place oil they want. If the oil cannot be drilled, Republicans’ faux concern over oil and gas prices is irrelevant.
Both Presidential candidates have indicated some level of response to deal with CO2 emissions. A cap-and-trade system looks likely to be implemented, at which point fossil fuels should be more expensive to acquire and burn. This would lead to even less economically recoverable oil shale, as oil shale drilling is very CO2 intensive.
Reducing gas prices will require improving energy efficiency, higher fuel economy standards, and renewable energy technologies. Energy efficiency is by far the cheapest option and could reduce our fossil fuel consumption by 1/3 if implemented correctly. The auto manufacturer and oil corporations don’t like higher fuel economy standards, evident by the incredible length of time between increased CAFE standards in the U.S. (while the rest of the world wisely increased theirs). Renewable energy technologies have helped boost Colorado’s economy since the citizens and folks like Gov. Bill Ritter have made it a cornerstone of our policies. That will continue as more citizens demand an end to the use of fossil fuels.
Overall, I don’t think the off-shore and oil shale drilling components of this legislation will go too far, given the unlikely scenario of the Senate voting for it and the President signing it. Making the trade for those and renewable energy funding was a smart move by House Democrats. They can tell constituents they voted for drilling and renewables, which is heavily in favor by a majority of Americans. Republican attempts to say Democrats aren’t for “all of the above” is likely to fall on deaf ears of Unaffiliated voters, so long as Democrats are smart enough to define their votes in the next 50 days or so.
Given the unlikelihood of a Senate vote, these efforts pave an interesting path toward next year. I think Barack Obama will become President and I think Democrats will expand their majorities in both houses. Given the type of Democrats running this year, I think that next year’s energy legislation will be more solidly pro-renewable and more responsible with respect to drilling.
